Tankless Water Heater Tax Credit 2011, 2012

Are you considering buying a tankless water heater or have you purchased one in the past year? If so, then you’ll want to know how you can claim the energy tax credit for water heaters.

President Obama signed The American Recovery and Reinvestment Act of 2009, on February 17, making great changes to the Emergency Economic Stabilization Act of 2008.

Under the new Stimulus bill:

• Tax credits will now be effective until December 31, 2009.
• Tax credits have been increased to 30% from 10%.
• Instead of limiting the tax credits to a specific dollar amount, tax credits are up to 30% of the cost. (Previously $300 for a tankless water heater)
• The maximum credit has been raised $1500; however some improvements are not subject to the $1500 maximum, these include solar panels and solar water heaters.

The following improvements have tax credits available to consumers for 30% of the cost, up to $1500, in 2009 & 2010 (for existing homes only):

• Gas tankless water heaters (non-solar, non-electric) placed into service before December 31st, 2010
• Water Heaters
• Windows and Doors
• Insulation
• Roofs (Metal & Asphalt)

Some of these tax credits are available at 30% of the cost, with no upper limit through 2016 (for existing homes & new construction) for:

• Solar Water Heaters
• Solar Panels
• Geothermal Heat Pumps
• Small Wind Energy Systems
• Fuel Cells

The following are requirements under the bill to receive the tax credit:

• You must choose a qualifying tankless water heater (see above)
• The manufacturer’s certification statement is required
• You must have the improvement in place within the specified dates
• Form 5695 is required to be filed with your return

Visit TurboTax Online to get all the energy tax credits you can on your tax return.